STRATEGIC MANAGEMENT

The Relationship Between Company's Strategy & Structure

The Relationship Between Company's Strategy & Structure

Introduction

The theory of the relationship between structure and strategy is the great contribution of specialists in the business organization model to estimate the market orientation of this work. This relationship is expressed, in particular, under the maxim that "the structure must fit the strategy (Johnson, 2008).

The importance of this statement is such that it happens to be the basic theoretical foundation that supports the development of the model estimation will be presented here. If it is true that the structure is or adapts to the strategy, it will somehow be a true reflection of the same organization. So if, you are able to develop a measure that identifies various practical ways and in turn joined in the degree of market orientation will have developed an estimation model based on organizational structures.

Discussion

This relationship was discovered and developed by authors business planning specialists like Alfred Chandler, and Lawrence-Lorsh and corroborated by most who have studied the subject. Its acceptance is now so widespread that you could say it is a "beginning" in business organization (Chandler, 2006).

Chandler, found that strategy determines structure (i.e., the second has to adapt to the first) and that changes in the business environment resulting in new strategic opportunities that in turn require changes in organizational structure for correct and successful implementation. His study on the organizational evolution of 70 of the large American companies also revealed that although the structure tends to follow the strategy, this did not occur until serious internal mismatch between the new strategy and the old structure, caused. Hence, Chandler points out his thesis with the famous phrase in company's strategy structure.

The four dimensions of organizational visibility

In Strategy and Structure, Chandler identifies four dimensions of visibility, for better management of large firms: information management rigorous and quantitative, centralization of the decision and therefore, a rise of this information, a company with the functional departments are coordinated them, and then a decentralized distribution that meets the strategic function (Chandler, 2006).

Visibility of activities by management information

That is to say take a centralization of decision-making process of the company is also developing reliable measures that management has appropriate visibility of business operations. The figures carry the information of the company. This is to be able to decide better decisions. This expansion of visibility is an approach to streamline decision-making; it requires, therefore, a great job of defining the perimeters, the ...